Disputes, Litigation and Arbitration

Disputes in Germany: an overview

Disputes in Germany can be resolved in several forums, and the choice has a direct effect on speed, cost, confidentiality and enforceability. Most business disputes are decided by the ordinary civil courts under the Code of Civil Procedure (ZPO), from the regional courts through the Higher Regional Courts to the Federal Court of Justice (BGH). Since 1 April 2025, the federal states can also set up specialised Commercial Courts and Commercial Chambers that conduct proceedings in English. Arbitration under the tenth book of the ZPO, often administered by the German Arbitration Institute (DIS) or the International Chamber of Commerce (ICC), remains the preferred route for many international contracts, and mediation and expert determination complement both.

German dispute resolution has a reputation for predictability. Court fees and recoverable lawyers' fees are set by statute and capped for large cases, judges manage proceedings actively and encourage settlement, and judgments are enforceable throughout the EU without a separate procedure. At the same time, the system has features that surprise foreign parties: there is no pre-trial discovery, courts expect substantiated written pleadings from the outset, and, outside the new Commercial Courts and Commercial Chambers, proceedings are conducted in German.

This pillar page explains the main routes for resolving disputes in Germany and links to our detailed guides on commercial litigation, the new Commercial Courts, international arbitration and collective actions. It is written for general counsel, managing directors and in-house lawyers who need to decide how to draft dispute resolution clauses and how to respond when a dispute arises.

Litigation before the state courts

State court litigation is the default for disputes in Germany unless the parties have agreed otherwise. Local courts hear money claims up to EUR 10,000, and regional courts hear larger claims and certain matters regardless of value (§§ 23, 71 GVG). At the regional courts, business disputes can be heard by a civil chamber or, on the claimant's application, by a chamber for commercial matters with a professional judge and two lay judges from business (§ 95 GVG). Parties must be represented by lawyers before the regional and higher courts.

Proceedings are largely written. The court sets deadlines for submissions, holds one or a few hearings, discusses its preliminary view and seeks a settlement. Evidence is taken by the court through witnesses, court-appointed experts, documents, inspection and examination of parties; there is no general disclosure, but courts can order the production of specific documents (§ 142 ZPO). The losing party bears the costs, including the winner's statutory lawyers' fees (§ 91 ZPO). Appeals go to the Higher Regional Court and, with leave, to the BGH. Interim relief, including preliminary injunctions and freezing orders, is available quickly where urgency is shown. Our page on commercial litigation explains each step.

Interim relief and specialised jurisdictions

Speed is one of the strengths of the German courts in urgent matters. Preliminary injunctions can be obtained within days where a party shows its claim and the urgency by credible evidence, often without a hearing, and freezing orders secure monetary claims where enforcement is at risk. Prospective defendants can file protective letters in a central electronic register so that the court hears their arguments before deciding. Interim relief is also available from state courts in support of arbitration.

Not all disputes in Germany go to the civil courts. Employment disputes are heard by the labour courts, tax disputes by the fiscal courts, and disputes with public authorities, including many regulatory and planning matters, by the administrative courts. Patent infringement cases are concentrated at specialised regional courts and, for European patents, can also be brought before the Unified Patent Court, while decisions of the Federal Cartel Office are reviewed by the Higher Regional Court in Düsseldorf. Identifying the correct court and the applicable procedural rules is the first step in any dispute strategy.

Commercial Courts and English-language proceedings

The Act to Strengthen Germany as a Venue for Justice entered into force on 1 April 2025 according to the Federal Government. It allows the states to establish Commercial Courts at the Higher Regional Courts, which hear at first instance B2B disputes, disputes relating to company acquisitions and disputes between companies and their board members with a value of at least EUR 500,000 (§ 119b GVG).

The parties must agree on the Commercial Court, either in advance or by the defendant's acceptance in its defence. Proceedings can be conducted entirely in English where the state provides for it (§ 184a GVG), and the judgment can be appealed by revision to the BGH without leave (§ 614 ZPO).

The new courts borrow elements from arbitration: an organisational conference at the outset to agree a timetable, a verbatim transcript on request, and panels of experienced judges. According to guidelines published by a working group of Higher Regional Courts in November 2025, ordinances had been issued in nine states, and Commercial Chambers for English-language proceedings had been set up at regional courts in Baden-Württemberg, Berlin, Hamburg, Hesse, Lower Saxony and North Rhine-Westphalia.

For companies, the new courts are a serious alternative to arbitration in European business relationships. Because jurisdiction depends on the state ordinance, parties should check which subject areas the chosen court covers and whether English is available for their type of dispute before relying on it in a contract.

Arbitration and alternative dispute resolution

Arbitration seated in Germany is governed by §§ 1025 to 1066 ZPO, which largely follow the UNCITRAL Model Law. Parties choose their arbitrators, the language and the procedure, the proceedings are confidential, and awards can be enforced in the many states that are party to the New York Convention. German courts support arbitration: the Higher Regional Courts decide on the appointment and challenge of arbitrators, on admissibility and on setting aside and enforcement (§ 1062 ZPO), and set-aside applications must be filed within three months of receipt of the award (§ 1059(3) ZPO), on limited grounds.

The 2018 DIS Arbitration Rules, with their supplementary rules for corporate disputes and expedited proceedings, are the most widely used institutional rules for arbitrations seated in Germany, and the ICC Rules are common in international contracts. German arbitration law is about to be modernised: a government bill (BT-Drs. 21/8414), reported by the Bundestag press service on 7 October 2026 (hib 793/2026), would expressly allow video hearings and electronic awards, ease the form requirement for arbitration agreements and permit English-language court proceedings in arbitration matters. It was pending in November 2026.

Mediation and expert determination

Not every dispute needs a judgment or an award, and many business relationships are worth preserving. Mediation, conducted under the Mediation Act by a neutral mediator without decision-making power, is used in shareholder, family business, construction and long-term supply disputes where the relationship matters. Courts can refer parties to a conciliation judge who can use mediation methods. Expert determination is common for technical questions and for purchase price adjustments in M&A transactions, where an independent accountant decides on the closing accounts. Multi-tier clauses that combine negotiation, mediation or expert determination with arbitration or litigation need precise drafting to avoid disputes about the process itself.

Corporate and post-M&A disputes

Corporate disputes are a field where the choice of forum is particularly important. Challenges to shareholder resolutions of a stock corporation must be brought within one month before the regional court with exclusive jurisdiction, and they cannot be assigned to the Commercial Courts. In a GmbH, they can be arbitrated if the articles contain an arbitration clause that ensures that all shareholders can participate, which is what the DIS Supplementary Rules for Corporate Disputes are designed to achieve. Post-M&A disputes about purchase price adjustments, earn-outs and warranties are typically resolved through a combination of expert determination and arbitration, or now also before a Commercial Court.

Collective actions and mass claims

Germany has developed several instruments for mass claims. Qualified consumer associations can bring redress actions and model declaratory actions against businesses under the Consumer Rights Enforcement Act (Verbraucherrechtedurchsetzungsgesetz, VDuG), which implements the EU Representative Actions Directive. Small businesses with fewer than 10 employees and annual turnover or balance sheet total of no more than EUR 2 million are treated as consumers for this purpose (§ 1(2) VDuG). These actions are heard at first instance by the Higher Regional Court for the defendant's seat (§ 3 VDuG) and require that the claims of at least 50 consumers may be affected (§ 4 VDuG).

Investors can pursue capital markets claims through the model case procedure under the Capital Markets Model Case Act (KapMuG). In antitrust, data protection and other areas, claims are often bundled by assignment to a claim vehicle that sues in its own name with litigation funding. For businesses as defendants, these instruments create significant exposure and require a coordinated strategy. Our page on collective actions explains the procedures, and the guide on antitrust damages covers one of the most active fields.

Defending mass claims

For companies facing many similar claims, early strategy matters. Defendants need to assess the merits across the portfolio of claims, decide whether to defend test cases or seek a collective settlement, manage parallel proceedings in different courts and countries, and consider how disclosures in one case affect the others. Insurance coverage, provisions in the financial statements and communication with customers and investors must be aligned with the litigation strategy. Where claims are bundled by assignment, the validity of the assignment model and the funding arrangements can be important lines of defence.

Choosing a forum for disputes in Germany

The right forum for disputes in Germany depends on the counterparty, the type of dispute, the need for confidentiality and the place where a decision will have to be enforced. The table summarises the main differences.

Practical considerations often decide the issue. A German company contracting with a customer in China or the Gulf will usually prefer arbitration because of enforcement under the New York Convention. A dispute between two European companies about a share purchase agreement may be heard efficiently and at lower cost by a Commercial Court. A distribution dispute that requires an urgent injunction may need a state court in any case, even where the main dispute goes to arbitration.

Illustration: a German mid-sized manufacturer reviews its contract templates. For sales to customers in Asia it keeps an ICC arbitration clause seated in Germany, because awards are enforceable there under the New York Convention. For supply agreements with European customers above a certain volume, it introduces a clause naming the Commercial Court at a specified Higher Regional Court, with English as the language of the proceedings. For domestic contracts with small customers, it keeps the regional court at its seat. Each clause carves out interim relief from the competent state courts.

Drafting dispute resolution clauses

A good dispute resolution clause is short and precise. It should address the following points:

• The forum: a named court, a named Commercial Court or arbitration under specified rules.
• Exclusivity of the chosen forum and any carve-outs for interim relief.
• The seat of arbitration or the place of jurisdiction, and the language of the proceedings.
• The governing law of the contract, stated separately from the forum.
• Any pre-arbitration or pre-litigation steps, with clear deadlines.
• Expert determination for technical or accounting questions, if required.

Enforcement and cross-border disputes

Enforcement is the final test of any dispute strategy. German judgments are enforceable in other EU member states without a declaration of enforceability under the Brussels Ia Regulation, and judgments from other member states are enforced in Germany in the same way. For judgments from third states, recognition depends on international conventions, including the Hague Judgments Convention of 2019 where it applies, or on the German rules in § 328 ZPO, which among other things require reciprocity. Arbitral awards are enforced under the New York Convention, which is often the decisive advantage of arbitration in contracts with parties outside Europe.

Cross-border disputes in Germany also raise questions of service of documents abroad, taking of evidence in other countries, translation and coordination of parallel proceedings. Interim measures, such as freezing orders over bank accounts, can be obtained in Germany to secure enforcement of claims pending abroad. Planning enforcement before the dispute starts, by identifying assets and choosing the forum accordingly, saves time and cost later.

Timing matters too. Most contractual claims become time-barred three years after the end of the year in which the creditor learned of them, and negotiations or filing an action suspend limitation only under specific conditions. Companies involved in disputes in Germany should therefore record limitation dates, consider standstill agreements during negotiations, and avoid letting settlement talks run on without securing their claims.

Costs and funding complete the picture. In state court proceedings, costs are calculated by statute on the value in dispute, capped at EUR 30 million in most cases, and the losing party reimburses the winner's statutory fees. In arbitration, the tribunal allocates costs at its discretion, usually following the outcome. Third-party litigation funding is available for commercial claims, and claimants from outside the EU and EEA may have to provide security for the defendant's costs in German court proceedings. A realistic cost and risk budget at the outset is part of every decision to litigate disputes in Germany.

How TRW & Co helps

We represent companies, shareholders, directors and investors in disputes in Germany before the state courts, the new Commercial Courts and arbitral tribunals under the DIS, ICC and other rules. We handle contract, corporate, post-M&A, construction, energy, distribution and antitrust damages disputes, interim injunction proceedings, and the defence of collective and mass claims. We advise on dispute resolution clauses, assess prospects and cost risks, and enforce judgments and awards in Germany and abroad, coordinating with counsel in other jurisdictions where needed. To discuss a dispute or a clause, please contact us.